Correlation Between Nuveen Floating and First Trust
Can any of the company-specific risk be diversified away by investing in both Nuveen Floating and First Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nuveen Floating and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Floating Rate and First Trust High, you can compare the effects of market volatilities on Nuveen Floating and First Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nuveen Floating with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Floating and First Trust.
Diversification Opportunities for Nuveen Floating and First Trust
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and First is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Floating Rate and First Trust High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust High and Nuveen Floating is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nuveen Floating Rate are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust High has no effect on the direction of Nuveen Floating i.e., Nuveen Floating and First Trust go up and down completely randomly.
Pair Corralation between Nuveen Floating and First Trust
Considering the 90-day investment horizon Nuveen Floating is expected to generate 1.11 times less return on investment than First Trust. In addition to that, Nuveen Floating is 1.06 times more volatile than First Trust High. It trades about 0.13 of its total potential returns per unit of risk. First Trust High is currently generating about 0.15 per unit of volatility. If you would invest 1,186 in First Trust High on August 31, 2024 and sell it today you would earn a total of 36.00 from holding First Trust High or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 26.77% |
| Values | Daily Returns |
Nuveen Floating Rate vs. First Trust High
Performance |
| Timeline |
| Nuveen Floating Rate |
| First Trust High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nuveen Floating and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Floating and First Trust
The main advantage of trading using opposite Nuveen Floating and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Floating position performs unexpectedly, First Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Trust will offset losses from the drop in First Trust's long position.| Nuveen Floating vs. MFS Investment Grade | Nuveen Floating vs. Eaton Vance Municipal | Nuveen Floating vs. DTF Tax Free | Nuveen Floating vs. HUMANA INC |
| First Trust vs. Franklin Templeton Limited | First Trust vs. Blackrock Floating Rate | First Trust vs. Cohen Steers Limited | First Trust vs. Blackstone Gso Long |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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